I-Team Report: Project Ike

Hundreds of millions of tax dollars were intended to rebuild Illinois after the state was caught in the aftermath of a hurricane two years ago. Although Illinois was eligible for the aid, the I-Team has learned the money is propping up projects that have nothing to do with disaster damage.

Our reports the past four months into the misuse of flood relief money meant for Cook County disaster victims has opened the gates to a deluge of questionable state spending.

The I-Team investigated nearly $200 million federal tax dollars that will flow into Illinois next year for what the state says is disaster recovery. But after seeing where much of that money is going, you'd think Jake and Elwood were in charge of the spending.

The Blues Brothers first destroyed Dixie Square Mall 30 years ago. For years, the ruins were a wasteland in south suburban Harvey. Then, during the recent campaign for governor, even though Illinois faced a $13 billion deficit, candidate Pat Quinn managed to find the money for demolition and rebuilding.

"We want to make sure that this is a site available for development," Quinn said.

Mr. Quinn, who was re-elected, found the money long ago and far away. In 2008, 1,200 miles away, Hurricane Ike slammed into Galveston, Texas. Now, two years later disaster relief funds from the hurricane are financing a project that was never even affected by the storm.

Illinois will use $4 million in federal response money to revitalize an eyesore -- Dixie Square Mall -- in downtown Harvey as part of the state's Disaster Recovery Ike Program.

"It was a perfect fit," said Warren Ribley, director, Illinois Department of Commerce and Economic Opportunity.

Ribley says using disaster relief money for non-disaster related projects is part of a "holistic approach" to recovery.

"It was just, we believe, a very good use of funds to rebuild a neighborhood and provide for long term revitalization of a community," Ribley told the I-Team.

In addition to Dixie Square Mall, state money is being sent to the Wagner Buick dealership in Belleville, east of St. Louis. The dealership has been there for nearly a century, but this year they're getting $1 million in tax money to stay put. According to the state grant tracker website, the million will make Wagner a "viable automobile dealer" and "stabilize the economy of southwestern Illinois."

"I wouldn't consider them pet projects. I would consider them long term economic development projects that are going to provide employment opportunities, housing stock, green areas that will help mitigate future flood impacts," Ribley said.

Last week, Ribley kicked off yet another state program in which millions in federal disaster funds will be given out for non-disaster microloans. Metro Chicago businesses are eligible for the loans, regardless of whether they felt a drop of flood water in 2008.

According to the state, flooding hurt the economy. Therefore, everybody is eligible to take part in the recovery.

"You have communities and counties that have been seriously and negatively impacted by disaster events, in this case floods, and there needs to be flexibility to provide for the communities," said Ribley.

According to the state program guidelines, as long as you're in a county that was declared a disaster area in 2008 you could be eligible for Project Ike money.